Brief Fact Summary. Plaintiffs, William Sadler et al., sought to inspect the records of Defendant corporation, NCR Corporation, for the purpose of identifying shareholders in order to tender an offer. Plaintiffs also sought a non-objection beneficial owners (NOBO) list.
Synopsis of Rule of Law. A party can inspect records under section 1315(a) of the New York Business Corporation Law even when through an agent as long as the elements of the statute are met.
No principle of corporation law and practice is more firmly established than a State's authority to regulate domestic corporations, including the authority to define the voting rights of shareholders.View Full Point of Law
Issue. The issue is whether Plaintiffs, wherein one plaintiff is acting at the behest of another plaintiff who otherwise does not qualify as a shareholder under section 1315(a) can compel Defendant to produce corporate records to identify other shareholders.
Held. The court held that the statute will be read on its face without the incorporation of agency law principles. As long as the requirements of the section are met, and there is no bad faith on the part of the Plaintiffs, then the request for the corporate records should be granted. These elements were met by Plaintiffs. Further, the request for the NOBO list is not unduly burdensome. Upholding the New York Statute does not violate the Commerce Clause because the New York Statute is not inconsistent with the Maryland statute even though the New York statute compels the records disclosure while Maryland’s law only allows for the disclosure with no mandatory requirements.
Discussion. The court simplifies the statute by allowing agency relationships to exist in order to meet the requirements of the statute, the rationale being that absent bad faith it should not matter.